Monday, August 3, 2009
Double Dip Still in the Cards
In May, CNBC wrote that we are in danger of a double-dip recession.
Hasn't that risk passed?
No. According to a lot of top economists and financial analysts, the risk is still very real:
- Martin Feldstein, professor of economics at Harvard University.
- The chief economist for MarketWatch, distinguished scholar of economics at Dowling College, Irwin Kellner
- And many others
Comparison of the current situation with the Great Depression provides important food for thought. And the demographic trends and crash in commercial real estate (and see this) both argue for another crash.
Indeed, it is not just the U.S.
For example, some analysts think that even China may head into a double dip downturn:
Andy Xie, a Sino-bear and commentator for Caijing, said Western analysts are in for a rude shock if they think that China's surging demand for raw materials implies genuine recovery...
Mr Xie thinks the spring recovery is an inventory spike, to be followed a double-dip downturn into next year as stimulus wears off.
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The Great Depression chart says it all. This time will be the same, we are at the beginning of the commerical real estate bust, with the derivative bust to follow , followed by the personal credit default bust. There is absolutely no doubt there is more bad stuff to come.
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